CHENG LOONG

Upgrading Smart Manufacturing Influence for 3R PLUS Net-Zero Total Circulation

Taiwan's paper industry uses plant fiber and recovered paper as raw materials. It also engages with technology innovation to expand the scope of waste to resources to provide the market with diversified options for green consumption and create the recycling value of the circular economy, becoming the oldest and most typical resource circulation industry and the industry indispensable to achieving the carbon reduction and carbon neutrality goals of the macro environment in Taiwan.

1. Rebuilding secondary forest through promoting total resource circulation and sustainable smart papermaking

In recent years, we have been actively integrating the total circulation of three major resources: products, energy, and water through the low-carbon S.M.A.R.T paper strategies: Subtraction-reducing resource consumption use, Materials-turning waste to energy, AI-smart production-sales, Recycling-reusing recovered paper, and Technologies-advanced processes to transform traditional factories into eco-friendlier smart and recycling plants. With an annual conversion rate of up to 92.5 %, we recycle up to 40% of recovered paper weighing 1.6 million MT into eco-friendly products. Additionally, we replace fossil fuels with large amounts of solid recovered fuel (SRF) produced from the manufacturing process to reduce carbon of nearly 9.1 million MT for Taiwan each year, creating the largest scale of waste recycling in Taiwan. Through resource circulation and recycling, we provide green products for the market to indirectly mitigate the habitat damage from logging to retain about 5,233 Daan Forest Parks so as to build secondary forest and maintain biodiversity for Earth. Encouraging "reduce carbon from a piece of toilet tissue," we became Taiwan's only enterprise awarded the Carbon Footprint Label for six household paper products to help consumers easily practice carbon reduction in daily life.

2. Accomplishing carbon neutrality through four scientific carbon reduction roadmaps for agricultural and forest resource circulation

Since 2019, CLC has been implementing the "Smart Paper 4.0" lowcarbon transformation to achieve a scalable green impact through intelligent production and sales. Our goal is to shift papermaking from "near-zero" to "net-zero" by implementing energysaving, carbon reduction, and waste reduction measures. With a comprehensive strategic blueprint focusing on four scientific carbon reduction pathways–energy efficiency, renewable energy, circular lowcarbon fuels, and innovative carbon-negative technologies–we are driving deep and sustainable innovation. In 2022, we actively invested in sustainable circular economy practices, collaborating with industry, government, academia, and research institutions. Through initiatives such as plant fiber regeneration, high-value applications of biobased materials, and increased use of biofuels, we are constructing a 3R PLUS circular blueprint and contributing to the nation's goal of achieving carbon neutrality by 2050.

CLC Binh Duong Mill Becoming Paper Leader in Vietnam First Taiwan-invested Paper Mill Ranked CSI TOP 100

Focusing on innovation, circulation, and green energy and setting the new low-carbon & green energy paper company in Asia as the goal, we actively engage in global expansion and expanding sustainable production capacity to deploy competitive strengths in sustainable and low-carbon papermaking.

1. Expanding production lines for sustainable packaging materials! Commercial operation of CLC Binh Duong Mill Phase II, Mass production of first box plant in northern Vietnam in 2023

According to the statistics of International Corrugated Case Association (ICCA), the global corrugated case consumption in 2022 exceeded 274 billion m2, with an annual growth of 0.6%. With an annual GDP growth expected at 8%, the highest in Southeast Asia, Vietnam's paper box consumption exceeded 2.58 billion m2, with an annual growth of 14.4%. To capture the green package business opportunities, we make continuous operations deployment at home and abroad with circulation and recycling as the strategic goals to expand the scale of recovered paper recycling. Alongside the industrial paper line with an annual capacity of 400,000MT of CLC Binh Duong Mill Phase II will start the commissioning in 2023H1, which its annual capacity of CLC's paper and corrugated board will be boosted to 2.502 million MT. Following the upcoming start of the mass production of CLC Ben Cat Box Plant, and Bac Giang Box Plant, our first box plant in northern Vietnam will start the commissioning in 2023H1, with the box capacity will increasing by 264 million m2 to a total capacity of 2.051 billion m2. And the third industrial paper line scheduled and the deployment of a one-million-MT integrated papermaker base in Vietnam will be completed.

2. TOP 100 Sustainable Businesses 2022 (CSI 2022): CLC scales for good to contribute to local industry resources

Since its establishment in 2016, CLC Binh Duong Paper Mill has adhered to the group's core principles of "caring for life, resource utilization, and contributing to society," aiming to become a benchmark for sustainable paper industry in the local community. In 2022, the mill utilized approximately 330,000 metric tons of recycled paper, achieving a 100% recycling rate and processing over 30% of locally sourced recycled paper in Vietnam, practicing "full resource circulation". The mill also implemented ISO 50001 energy management, surpassing annual energy and steam conservation goals. Internally, talent development through Total Productive Maintenance (TPM) and proposal improvement systems, along with competitive salaries, annual free health check-ups, six months of maternity leave, and other comprehensive compensation benefits, contribute to local employment growth and increased income. Externally, Binh Duong Paper Mill established Binh Duong Hospital, assisted the Vietnamese government in purchasing COVID-19 vaccines, and provided epidemic prevention materials. These efforts were recognized with the "2022 CSI Vietnam Top 100 Sustainable Businesses" award, ranking 14th among over 400 participating companies.

3. From first in Taiwan to first in Vietnam: Transplanting GHG control experience to set example in Vietnam's paper industry ahead of the government

Since obtaining the world's first ISO 14064-1 certificate in 2005, CLC has initiated emission reduction management. While the Vietnamese government is still in the process of drafting related regulations, Binh Duong Mill has successfully obtained the ISO 14064-1 certificate, becoming the first benchmark enterprise in the local paper industry. In the future, the mill will continue to use low-carbon and circular fuels, improve circular energy efficiency, utilize local agricultural residue such as cashew shells and rice grain as bioenergy fuel, and actively introduce advanced equipment and innovative technologies to enhance energy efficiency and reduce resource consumption.

Building Sustainability National Team by Organizing Paper Industry Carbon Neutrality Alliance

To support IDB's "getting seniors to help juniors" policy, we have established the "Industrial Paper Carbon Neutrality Alliance," Taiwan's first carbon reduction appliance for industrial paper, in collaboration with upstream and downstream industry partners to build and implement a true green supply chain by optimizing the fundamental capability for carbon reduction through progressively inventorying the carbon reduction needs of partners, improving carbon management knowledge, and integrating government consultation resources.

1. Leading the whole industry chain through "getting seniors to help juniors"

According to CLC President Ching-Biao Chang, "Facing the upcoming carbon border tax of the EU and carbon fee of Taiwan, and the carbon reduction needs of branded customers of the supply chain, it needs the cooperation of the whole industrial chain to work together." As the center business of the Industrial Paper Carbon Neutrality Alliance, CLC will team up with upstream materials, equipment suppliers and downstream container customers of industrial paper to start the survey of the carbon reduction needs, organizational carbon inventory, and product carbon footprint inventory of members and build a carbon database for investment in low-emission technology and green energy, promotion of actual emission reduction, and acceleration of the low-carbon transformation of the industry chain led by CLC so as to turn the produced industrial paper into the first option of world-leading manufacturers. As we are the demonstration business of the appliance, we will share the experience in an alliance operation with competitors to promote the total low-carbon, green supply chain transformation to the paper industry.

2. Scale for Good! Expanding sustainability competitiveness with 300 suppliers

Emphasizing "Scale for Good!" As a leading player in the paper industry, CLC actively leads ESG dimensions such as improving low-carbon products, innovative applications, responsible production, employee development, and social inclusiveness through supply chain management. This includes setting SOPs, evaluation mechanisms, and guidance to establish a sustainable supply chain ecosystem. We organizes an annual ESG conference for suppliers, commending outstanding suppliers and exchanging ESG strategy trends. The third "2022 CLC Supplier ESG Conference" focused on three sustainability issues: climate change, low-carbon products, and information security. In addition to expert sharing, we planned a third-party "cybersecurity risk assessment service" to help the supply chain quickly understand cybersecurity risks, aiming for collaborative supply chain cybersecurity defense. With 300 key suppliers, CLC strives to create a sustainable ecosystem together.